Environmental taxation and industrial water use in Spain

Jaime Vallés-Giménez () and Anabel Zárate-Marco ()

INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, 2013, issue 25, 133-162

Abstract: The Spanish Water Act, 2001 shifted responsibility for wastewater treatment from municipal to regional government, and as a consequence the Autonomous Communities have begun to levy a Sanitation Charge, apparently with environmental objectives. Industrial demand for water in Aragon is estimated in this paper using a double logarithmic model with panel data to establish whether regional Sanitation Charges rationalise water consumption. The key explanatory variable is the Sanitation Charge, in addition to the water supply charges payable in the towns and cities of Aragon and other variables which capture the characteristics of the firms in the sample. The reduction in water demand achieved appears to be due to the environmental charge rather than to any actual increase in firms’ water costs.

Keywords: Industrial water consumption; Sanitation Charge; tax centralisation; regional government. (search for similar items in EconPapers)
JEL-codes: H23 H32 H71 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ris:invreg:0202

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